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April 2002 Subject:
Procedures and Guidelines on the Implementation of PEZA Board Resolution
No. 01-161 re the Determination of the Start of Commercial
Operations (SCO) as the Starting Date for the Availment
of the Income Tax Holiday (ITH) Incentive 1. For the purpose of the establishing the starting date of a PEZA-registered economic zone export enterprise’s availment of its Income Tax Holiday (ITH) incentive, the date of the “Start of Commercial Operations” (SCO) shall be the date specified in its Registration Agreement with PEZA, or the verified actual date when it begins commercial production of its registered product, whichever comes first. 2.
Prior to the actual start of its commercial operations, a PEZA-registered
export enterprise shall submit to the PEZA-Enterprise Regulations Department
(ERD), through the PEZA Administrator / Manager in the economic zone
where it is located, monthly progress reports on its project implementation,
which shall include the utilization of import permits issued by PEZA,
construction of its building(s), installation of machinery and equipment,
contractual agreements relevant to the implementation of its project,
activities of foreign nationals and non-resident alien employees granted
visas through PEZA and other pertinent information as may be required
by PEZA. 3.
A PEZA-registered export enterprise, which anticipates that it will
not be able to start commercial operations on the SCO date indicated
in its Registration Agreement (or in its application for registration
in case its Registration Agreement does not indicate its SCO date),
shall inform in writing the PEZA Administrator/Manager in the economic
zone where it is located of the adjusted or new SCO date. 4. Where a PEZA-registered locator enterprise does not start commercial operations on the SCO date indicated in its Registration Agreement and also fails to notify the PEZA Administrator / Manager in the economic zone where it is located of its adjusted or new SCO date, or where the actual SCO date cannot be clearly verified or determined, the date of the first importation of raw materials by the export enterprise shall be adopted as its SCO date, for the purpose of establishing the starting date of the export enterprise’s availment of its ITH incentive, without prejudice to PEZA imposition of applicable fines or penalties on the export enterprise for its failure to formally inform PEZA of its adjusted/new and actual SCO, as required. 5.
PEZA shall automatically cancel the registration of an economic zone
export enterprise which has not started actual commercial operations
after one (1) year from the SCO date indicated in its Registration Agreement,
or the adjusted / new SCO which it has formally informed PEZA of.
6. The following economic zone export enterprises, which were registered with EPZA/PEZA prior to the issuance of these guidelines and which started actual commercial operations later than the SCO dates indicated in their respective Registration / Supplemental Agreements, may re-apply with the PEZA Enterprise Regulations Department (ERD) for adjustment of their SCO dates, within ninety (90) days from the issuance of this Guidelines, provided their ITH periods have not yet lapsed:
PEZA-registered locator enterprises, which are already availing of the 5% Gross Income Tax incentive or which are already paying the regular corporate income tax, shall not be qualified to re-apply for adjustment of their SCOs. 7. Export enterprises shall submit the following documentary requirements, in connection with their re-applications for adjustment of their SCOs as described in Item No. 6 above:
This Memorandum Circular shall take effect immediately and shall supersede Memorandum Circular No. 96-0008 dated 18 December 1996. |